Institution details
Inter-American Development Bank (IDB)
Key facts
- Established in 1959
- Ownership: Public
Latest update: 03/12/2021
rating type | rating agency | type | rating |
---|---|---|---|
Institution rating | S&P | Foreign currency | AAA |
Products
- Flexible financing (ordinary capital)
- Concessional financing
- Guarantees
- Grants
- Private sector windows
Flexible Financing (Ordinary Capital)
- Flexible Financing Facility (FFF): Through built-in options in FFF loans, borrowers have the ability to tailor financial terms at approval or during the life of a loan
- The FFF platform—LIBOR-based financing with embedded options—enables clients to manage currency and interest rate risks
- Borrowers can also customize FFF loan repayment terms to better manage liquidity risks - Local Currency Financing (LCF): Borrowers can choose to obtain financing in their own currency or in alternative regional currencies at inception or during the life of a loan
- IDB also offers guarantees in local currency - Management of legacy financial products: Borrowers can transform loans under legacy financial products into flexible, market-based financing, thus enabling borrowers to manage their loan portfolio with the IDB to better suit their debt management programs
Concessional Financing
- Blended loans: Combination of a Concessional Ordinary Capital (OC) tranche with highly concessional financing terms, and a Regular OC tranche with market-based terms from the Ordinary Capital, that are disbursed pari-passu from a predetermined mix of Concessional OC and Regular OC allocation that varies by country based on its debt sustainability
- Concessional OC terms:
- Source of funding: Ordinary Capital
- Currency: USD
- Interest rate: 0.25% fixed rate
- Maturity: 40 years
- Grace period: 40 years
- Weighted average life (WAL): 40 years
- Amortization: Bullet repayment
Guarantees
- IDB offers guarantees to enhance financing of sovereigns with sovereign counter-guarantees
- Types of guarantees: Partial credit guarantees or political risk guarantees
- Uses of guarantees: Enhancement of bond issues, project finance, asset-backed securities, securities backed by future flows, or structured trade transactions
- Amounts: Calibrated to optimize impact on the underlying instrument’s rating
- Tenor: Maximum guarantee tenor of up to 20 years for policy-based interventions with a maximum WAL of 12.75 years; up to 25 years for investment operations with a WAL of 15.75 years
- Fees: Pricing neutrality applies between guarantees and loans
Grants
- IDB provides as grants non-reimbursable funds for technical cooperation programs, though some grants may be repaid to the IDB if the program eventually obtains a loan, either from the IDB itself or another source
- IDB Grant Facility: Grant resources dedicated specifically to Haiti
- Trust fund grants: All legally constituted public and private organizations are eligible to receive trust fund resources, although some funds limit their support to specific geographic areas and sectors
- Multilateral Investment Fund (MIF) grants: The MIF, an autonomous fund member of the IDB group, provides grants to support small-scale, targeted interventions that pilot new approaches and act as a catalyst for large reforms
- Social Entrepreneurship Program: Provides grants to private, non-profit, community-based organizations and public local development institutions
- Program resources may be used for technical assistance, training, investment in productive or basic services infrastructure, procurement of equipment and materials, working or operating capital, and/or marketing
Private Sector Windows
- Structured and corporate finance (SCF): Provides tailor-made medium- and long-term direct loans, guarantees, and technical assistance in the form of non-reimbursable financing for large companies and eligible state-owned enterprises, financial institutions with assets above USD 500 million, and investment funds with operations and projects in one of the IDB’s member countries
- SCF supports both project financing for greenfield and expansion projects through loans and guarantees, as well as corporate financing for expansions and modernizations
- SCF invests in high social impact sectors such as housing and MSMEs - SCF finances between 25% and 40% of the total cost of a project
- Provides up to USD 200 million in financing, and USD 400 million in exceptional cases
- Technical assistance usually ranges between USD 100 thousand to USD 1.5 million - Inter-American Investment Corporation (IIC): The IIC provides loans, guarantees, equity, and quasi-equity to SMEs in any of the 26 borrowing member countries
- Direct loans to medium-sized firms: USD 1 million to USD 20 million
- Small business loans: USD 100,000 to USD 600,000
- Equity investments: USD 2 million to USD 10 million, in the form of a direct stake in the company through the acquisition of shares or through the issuance of subordinated debt or loans with upside potential such as warrants or conversion rights - Multilateral Investment Fund
- Long-term loans: Up to USD 1 million- Equity investments: Up to USD 5 million
- Grants: Up to USD 2 million"
Performance highlights
What's new?
- IDB announced it is evaluating the creation of a “guarantee fund” to attract investments to Latin America, which needs financing for infrastructure projects
- IDB Invest issued local currency bond in COP equivalent to USD 50 million
- More detailed information on ADB’s interest rates, charges, and fees can be found on its website
- Generally, eligibility for ADB loans or loan guarantees is limited to any member country, any political subdivision or government organization unit thereof, any independent agency, semi-public enterprise, or private enterprise in the territory of a member country, regional organizations composed of member countries, and to the Caribbean Development Bank